General Motors Co. has agreed to pay $120 million to settle a state attorneys general probe of its mishandling of an ignition-switch defect, the latest financial hit to the Detroit auto giant over a safety crisis linked to numerous deaths and injuries.
GM's agreement, disclosed Thursday, settles consumer-protection investigations with 49 states and Washington, D.C., stemming from the faulty switch, which can slip from the run position and cut power in millions of older cars, disabling safety features including air bags. The defect has been linked to 124 deaths.
Continue Reading Below
The U.S.'s largest auto maker said it had "reached a constructive resolution" with the state attorneys general that, in addition to the payment, "assures GM will continue ongoing improvements made to ensure the safety of its vehicles."
State attorneys general alleged GM failed to disclose the safety defect in a timely manner and misled consumers when marketing vehicles.
"Instead of prioritizing customers, General Motors turned a blind eye for years and chose to conceal the safety defects associated with several models of their vehicles," New York Attorney General Eric Schneiderman said.
GM has acknowledged failing to recall about 2.6 million older vehicles with defective switches until early 2014 despite having internal evidence of a safety problem for at least a decade.
The settlement also addresses additional GM recalls that involved unintended rotation of ignition switches. In all, the settlement covers seven GM recalls in 2014 affecting more than nine million vehicles, multiple state attorneys general said.
GM, which has admitted to the safety failure and undertaken reforms, previously reached settlements with the U.S. Justice Department, shareholders and thousands of consumers totaling more than $2 billion.
GM agreed in September 2015 to pay $900 million to settle the Justice Department probe, which resulted in prosecutors charging the auto maker with criminal wire fraud and scheming to conceal a deadly safety defect from U.S. regulators. The company entered a deferred prosecution agreement, under which the government will seek to later dismiss the case if GM abides by the deal's terms.
Write to Mike Spector at email@example.com
(END) Dow Jones Newswires
October 19, 2017 14:31 ET (18:31 GMT)